Patrick Neale Consumer and Business Lawyer Blog

COVID – 19 UPDATE: Foreclosure and Eviction Moratorium – FHA, Fannie Mae, Freddie Mac

Tue, 22 Dec 2020 18:12:00 GMT

Our firm is tracking COVID-19 legislation, orders and benefits as they unfold. We are open and actively serving existing and new clients. The CARES Act codified protections for some homeowners against foreclosure and some renters against eviction. We are tracking the legislation passed by Congress yesterday and will provide relevant details after it is signed into law by the President.

FHA-Backed Mortgages:
Yesterday, December 21, 2020, the U.S. Treasury Department announced a two-month extension of the foreclosure and eviction moratorium on FHA loans through February 28, 2021. This is the fourth extension enacted since the pandemic began. The moratorium directs mortgage servicers to halt all new foreclosure actions and suspend all foreclosure actions currently in progress, excluding legally vacant or abandoned properties. It also directs servicers to cease all evictions of persons from FHA-insured residential properties, excluding actions to evict occupants of legally vacant or abandoned properties.

The FHA also has extended the deadline for residential borrowers with FHA mortgages to request initial forbearance through the end of February. FHA single family borrowers can defer or reduce their mortgage payments for up to six months, plus an additional six months if requested. Typically, repayment must begin within 1 year.

What this means for you: If you have an FHA-backed mortgage on your home, your lender/services may not begin or continue foreclosure actions or evictions before February 28, 2021. You have until that date to request forbearance (postponement of payments.)

Fannie Mae and Freddie Mac Backed Mortgages:
Fannie Mae and Freddie Mac also extended their moratoria, but only through January 31, 2021. They have not announced whether they will match the FHA extensions for forbearance.

Renters:
If you are renting a residential property that is financed with an FHA-backed mortgage, the existing COVID-19 evictions moratorium is extended until February 28, 2021. You are still required to submit the CDC Eviction Declaration form. The form and instructions can be found here. Unfortunately is may not be easy to determine whether the property you are renting is financed with a Federally-backed mortgage. You should promptly communicate with your landlord and get any agreements outside of your lease in writing.

These protections are currently only extended to properties financed by a federally backed mortgage, whether you are a renter or owner. This can be determined by going online here.
Other mortgage lenders and landlords may also provide relief at this time but are not mandated to do so.

We understand that this is a stressful and confusing time. We welcome your questions at 239-642-1485 or info@patrickneale.com.

The information provided herein is for informational purposes only and should not be construed as legal advice. The publication of this article does not create an attorney-client relationship between the reader and Patrick Neale & Associates. The reader should not act or refrain from acting based upon the information contained in this article without first contacting an attorney. The hiring of an attorney is a decision that should not be based solely upon advertisements or this article.

COVID-19 Update: Governor DeSantis Moves Florida to Phase 3 Reopening - Legal Challenges for Small Businesses

Sun, 27 Sep 2020 15:50:00 GMT

COVID-19 Update: Governor DeSantis Moves Florida to Phase 3 Reopening Effective Immediately
Legal Challenges for Small Businesses

Effective Friday, September 25, 2020 Florida’s Governor issued an executive order that moved the state to Phase 3 of the state’s reopening plan. This action lifts many of the limitations that had previously been placed on business operations. It is unclear exactly how local restrictions will be affected; however, the order does state that “justification” will have to be given in order to continue with stricter limitations. Individual businesses may still mandate wearing masks in their establishments.

The Governor’s order does not change the risks associated with COVID-19. CDC guidelines for safety remain in effect. The state is still recommending that people avoid crowded spaces.

There is considerable analysis and discussion taking place to determine what the exact guidance should be for local businesses. Patrick Neale will be discussing re-opening guidance during a presentation offered by the SBA and SCORE at noon on Monday, September 28. Registration for the free webinar is available here. Here are the presentation slides.

We will be providing additional guidance on this as soon as more clarification is available. In the meantime, feel free to contact our office with your questions and continue to stay safe.

Patrick Neale & Associates
239-642-1485
info@patrickneale.com

The information provided herein is for informational purposes only and should not be construed as legal advice. The publication of this article does not create an attorney-client relationship between the reader and Patrick Neale & Associates. The reader should not act or refrain from acting based upon the information contained in this article without first contacting an attorney. The hiring of an attorney is a decision that should not be based solely upon advertisements or this article.

COVID-19 Update : PPP AND EIDL Forgiveness - AUGUST 11, 2020

Wed, 19 Aug 2020 17:16:00 GMT

The SBA has issued additional guidance on Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) forgiveness in the form of FAQs (Frequently Asked Questions). The FAQs also address the impact EIDL advance payments have on PPP loan forgiveness, as well as questions regarding what to do about the PPP loan amount that is not forgiven.

The information provided in the FAQs can be very complex. The 11 page SBA FAQ document can be accessed here.

It is important to note that there are still pending legislative measures, executive actions and regulatory changes that may impact these FAQs in the future.

The PPP forgiveness topics covered in this latest FAQ include:

General Loan Forgiveness FAQs, such as: details of the application process; and whether you must make payments on the PPP loan prior to determining the forgiveness amount.

Loan Forgiveness Payroll Costs FAQs, such as: when payroll costs are paid or incurred relative to the actual Covered Period; is the gross or net payroll amount used to calculate cash compensation; how the payment of lost tips, commissions, bonuses or other forms of incentive pay qualify for loan forgiveness; what group health care expenses are considered payroll costs; what retirement contributions are eligible for forgiveness; how to determine the amount of owner compensation that is eligible for forgiveness.

Loan Forgiveness – Nonpayroll Cost FAQs, such as: costs relative to the Covered Period and Alternate Covered Period; interest on UNSECURED debt; recently renewed leases or refinanced mortgages payments; electricity supply charges vs. electricity distribution charges.

Loan Forgiveness Reduction FAQs, such as: calculation of full time equivalents (FTEs) if you offered to rehire the employees and they refused; if you use the May 1, 2019 – September 15, 2019 period to calculate your PPP amount, you must use the same period in 2020; how to calculate employees who made over $100,000; forgiveness if you reduce salaries or hourly wages; what forms of compensation the 25% wage reduction applies to.

The EIDL topics are all related to the relationship between an EIDL advances and PPP forgiveness:

The EIDL advance is deducted from the PPP forgiveness amount. The SBA determines the amount to be deducted and advises the lender.

If the PPP is not forgiven in full, the remaining balance must be repaid by the borrower. The bank you borrowed from will service the loan. The loan balance must be repaid by the maturity date (either two or five years, depending on when you got the loan.) If you are deemed to have been ineligible for a PPP loan, the SBA may seek immediate repayment of all of the PPP money, or other remedies.

If you got an EIDL advance in excess of your PPP amount, none of the PPP loan is forgivable. The repayment of that PPP loan is on the same schedule and subject to the same terms as above.

This continues to be a very complicated situation. We strongly recommend that borrowers consult with their accountants and attorneys before submitting a PPP forgiveness application.

Please feel free to contact Patrick Neale & Associates with your questions at 239-642-1485 or info@patrickneale.com.

Be safe and well,
Patrick Neale & Associates
www.patrickneale.com

The information provided herein is for informational purposes only and should not be construed as legal advice. The publication of this article does not create an attorney-client relationship between the reader and Patrick Neale & Associates. The reader should not act or refrain from acting based upon the information contained in this article without first contacting an attorney. The hiring of an attorney is a decision that should not be based solely upon advertisements or this article.

COVID-19 UPDATE: ECONOMIC INJURY DISASTER LOAN (EIDL) ADVANCE PROGRAM ENDED

Mon, 13 Jul 2020 09:57:00 GMT

The Small Business Administration’s Economic Injury Disaster Loan (EIDL) Advance program officially ended Saturday, July 11, 2020. This was the program that provided grants of $1,000 per employee, up to $10,000 to applicants for the EIDL loans. The Advance program was ended after expending its $20 billion in funding.

The EIDL loan program is still open and encouraging applications. The EIDL loan is a program that provides funding for small businesses that have suffered an economic injury because of the pandemic. The loans have a thirty (30) year maturity, bear interest at 3.75% per annum (2.75% for non-profits) and have a one-year payment deferral.

Always feel free to contact Patrick Neale & Associates with questions about these programs or any other issue.

Phone: 239-642-1485. Email: info@patrickneale.com

The information provided herein is for informational purposes only and should not be construed as legal advice. The publication of this article does not create an attorney-client relationship between the reader and Patrick Neale & Associates. The reader should not act or refrain from acting based upon the information contained in this article without first contacting an attorney. The hiring of an attorney is a decision that should not be based solely upon advertisements or this article.

COVID-19 UPDATE: PAYCHECK PROTECTION PROGRAM APPLICATION DEADLINE EXTENDED

Mon, 06 Jul 2020 09:39:00 GMT

On July 4, 2020, an extension to the Paycheck Protection Program (PPP) was signed into law. Small businesses and others who qualify for the PPP now have until August 8, 2020 to apply for these forgivable loans. There is still $130 billion left in the program for loans. The SBA has not yet issued any new rules to this round of PPP, but it is almost certain they will.

The program basics are the same.
• You must go to the bank and apply.
• At least 60% of the money needs to be spent on payroll to qualify for forgiveness.
• The rules that were part of the last round of PPP funding, effective June 19, 2020, are those in place - as of now. A reference to those is contained on our website. You may also download the the latest PPP FAQs from the SBA website.

Congress is expected to look at additional relief for individuals and businesses when it returns from its Fourth of July recess. We will issue new updates as they become available.

As always feel free to contact us with any questions you may have and please stay safe.

Patrick Neale and Associates
239-642-1485
info@patrickneale.com

The information provided herein is for informational purposes only and should not be construed as legal advice. The publication of this article does not create an attorney-client relationship between the reader and Patrick Neale & Associates. The reader should not act or refrain from acting based upon the information contained in this article without first contacting an attorney. The hiring of an attorney is a decision that should not be based solely upon advertisements or this article.

COVID-19 UPDATE: FLORIDA GOVERNOR EXTENDS FORECLOSURE AND EVICTION MORATORIUM UNTIL AUGUST 1, 2020

Wed, 01 Jul 2020 09:59:00 GMT

COVID-19 UPDATE: FLORIDA GOVERNOR EXTENDS FORECLOSURE AND EVICTION MORATORIUM UNTIL AUGUST 1, 2020

On June 30, 2020, the Governor of Florida, through Executive Order 20-159, extended the moratorium on foreclosures and evictions that was originally enacted by Executive Order 20-94 on April 2, 2020 until 12:01 AM August 1, 2020. The exact language of the original order being extended is:

"Section 1. I hereby suspend and toll any statute providing for a mortgage foreclosure cause of action under Florida law for 45 days from the date of this Executive Order, including any extensions.

Section 2. I hereby suspend and toll any statute providing for an eviction cause of action under Florida law solely as it relates to non-payment of rent by residential tenants due to the COVID-19 emergency for 45 days from the date of this Executive Order, including any extensions.

Section 3. Nothing in this Executive Order shall be construed as relieving an individual from their obligation to make mortgage payments or rent payments.”

This is Temporary Relief

Courts around the state have interpreted this differently as to its impact, but in general it stays all foreclosure actions, except where courts have interpreted it to not apply to commercial foreclosures. Further, it is very important to note that, as to evictions, it only applies to evictions for non-payment of rent. Finally, it does not relieve anyone from the liability for the rent or mortgage payments that come due during the time of the moratorium.

It is important that if you are a tenant who has been unable to pay your rent, the landlord cannot evict you during the time of the moratorium. However, once the moratorium is lifted, you will have to deposit the past due rent into the registry of the court to keep from being rapidly evicted. If you have a mortgage that you are unable to pay at this time, you should work directly with your lender.

As always, we are available and happy to help with any questions that you have. Just call our office at 239-642-1485 or email info@patrickneale.com.

Be safe and well and enjoy the 4th of July!

Patrick Neale & Associates

The information provided herein is for informational purposes only and should not be construed as legal advice. The publication of this article does not create an attorney-client relationship between the reader and Patrick Neale & Associates. The reader should not act or refrain from acting based upon the information contained in this article without first contacting an attorney. The hiring of an attorney is a decision that should not be based solely upon advertisements or this article.

COVID-19 Update: PPP – as of June 19, 2020

Sun, 21 Jun 2020 16:41:00 GMT

THE LAST DAY FOR A LENDER TO OBTAIN A PPP LOAN NUMBER IS JUNE 30, 2020. IF YOU ARE CONSIDERING APPLYING AND HAVE NOT, DO IT NOW.

As has been the case with this program since its inception, the rules change very quickly and may or may not be retroactive to your particular situation. The Paycheck Protection Program (PPP) was created as part of the CARES act signed into law on March 27, 2020. It provided various types of relief from the impacts of the COVID pandemic to businesses. Additional funding was added to the PPP on April 24, 2020. On June 5, 2020, the president signed into law the Paycheck Protection Program Flexibility Act of 2020 (PPPFA). This legislation incorporated changes to the original Paycheck Protection Program that had been requested by borrowers, lenders and business groups. There were eight major changes incorporated in the PPPFA, some of which were modified by subsequent Treasury Department guidance issued last week.

The eight major changes were:
1. Borrowers that received a loan before June 5, 2020 can choose either an eight week or twenty-four-week period to spend the money received on the PPP loan. Previously, the expenditures had to be made in an eight-week period before June 30, 2020.
2. Borrowers that received loans AFTER June 5, 2020 will have the shorter of twenty- four weeks, or the time from the date of the loan until December 31, 2020 to spend the money.
3. Before PPPFA, 75% of the PPP loan had to be spent on payroll expenses, as such expenses are defined in the PPP and PPPFA. PPPFA lowered that requirement to 60% and appeared to have created a “cliff” where if you did not spend 60% on payroll, none of the loan was forgiven. That “cliff” has been eliminated based upon a revision to the Interim Final Rule regarding the PPP published in the Federal Register on June 16, 2020.
4. The penalty applied to the forgiveness calculation for a reduction in workforce has now been extended to allow for rehiring of a sufficient number of employees by December 31, 2020.
5. There have been exceptions created to the reduction in workforce penalty for businesses that attempted to rehire employees but could not and where federal guidelines prevented the business from being able to rehire a full staff.
6. The repayment period for PPP loan amounts that are not forgiven has been extended to five years, but only for those loans that were received after June 5, 2020. Banks have the option, but not the requirement, to extend the two-year repayment period that existed under the original PPP to the five-year period provided under the new law.
7. All employers can defer payment of the employer’s share of payroll taxes for two years.
8. The definition of what expenses are still deductible is still in question but are addressed in the revised Interim Final Rule dated June 16, 2020.

The Treasury Department also issued new forgiveness applications last week. On June 17, 2020, new forgiveness applications were published. The original forgiveness application was revised to implement the PPPFA changes. Treasury also issued a new EZ version of the forgiveness application for borrowers that:

• Are self-employed and have no employees, OR
• Did not reduce the salaries or wages of their employees by more than 25%, and did not reduce the number or hours of their employees, OR
• Experienced reductions in business activity as a result of health directives related to COVID-19 and did not reduce the salaries or wages of their employees by more than 25%.

Overall, the PPP is a very positive program for small businesses. The most important thing to remember in either applying for the loan or seeking forgiveness is to get the advice of an accountant and attorney who are familiar with the program. Another point is that if you do get a PPP loan, deposit the funds into a new and separate account that is solely for the purpose of holding and expending the PPP money. It will make the application for forgiveness much simpler.

Feel free to contact Patrick Neale & Associates to help you sort through the PPP maze, and stay safe and well.

The information provided herein is for informational purposes only and should not be construed as legal advice. The publication of this article does not create an attorney-client relationship between the reader and Patrick Neale & Associates. The reader should not act or refrain from acting based upon the information contained in this article without first contacting an attorney. The hiring of an attorney is a decision that should not be based solely upon advertisements or this article.

COVID-19 Update: Foreclosures and Evictions

Fri, 19 Jun 2020 15:13:00 GMT

There are a number of different and sometimes conflicting measures that have been enacted by the U.S. Treasury department, Federal Housing Finance Agency, FHA, FNMA, Freddie Mac, GNMA, Florida Supreme Court, Florida Governor and the Chief Judge of the Twentieth Judicial Circuit, among others to respond to the COVID-19 pandemic. This communication will give a short description of the overall status of the various programs as of June 19, 2020.

Federal Mortgage Protections

• Federally backed mortgages (FHA, FNMA, USDA, GNMA, etc.) are covered by these protections.
• You can determine owns your mortgage at this website.
• As of June 17, 2020, FHA, FNMA and Freddie Mac mortgages now under a moratorium on foreclosures and evictions for single family dwellings until August 31, 2020.
• Approximately 80% of all home mortgages are federally backed.
• Lenders with federally backed mortgages are required to give up to one (1) year of forbearance from making payments. The borrower must request this from the lender/servicer.
• The payments during the forbearance continue to accrue, but the lenders are supposed to work with the borrower on the repayment of those amounts.
• Most private mortgage companies are also offering some form of relief, but it depends on each different servicer and mortgage holder. The borrower must request the relief.

Florida Governor’s Executive Orders

• Governor issued Executive Order 20-94 on April 2, 2020 which suspended and tolled all actions under foreclosure statutes. It also suspended and tolled all residential evictions for non-payment of rent. It was effective for forty-five (45) days from then. It has been extended twice, the last time by Executive Order 20-137 on June 1, 2020 and is now effective until July 1, 2020.
• These orders do not relieve the renter or borrower from the obligation to make the payments.

Florida Supreme Court

• The Florida Supreme Court has issued Administrative Orders suspending what are called writs of possession. This writ allows the party foreclosing on a property or evicting someone from a property to get a writ of possession that gives law enforcement the power to physically remove someone and their possessions from a property. The last of these orders (A)SC 20-23, Amendment 4, issued June 16, 2020) expires on June 30, 2020.

We are happy to answer any additional questions you may have. Please feel free to contact our office.

The information provided herein is for informational purposes only and should not be construed as legal advice. The publication of this article does not create an attorney-client relationship between the reader and Patrick Neale & Associates. The reader should not act or refrain from acting based upon the information contained in this article without first contacting an attorney. The hiring of an attorney is a decision that should not be based solely upon advertisements or this article.

COVID-19 Update: Changes to Economic Injury Disaster Loan (EIDL)

Fri, 19 Jun 2020 13:33:00 GMT

The Small Business Administration (SBA) announced that on June 15, 2020 it would once again begin accepting applications for the EIDL loan and grant program from all types of businesses that meet the criteria of program. The applications for these loans are submitted directly to the SBA through its portal. EIDL is a two-phase program of financial assistance through the SBA. Prior to this change, EIDL applications had been limited to agriculture-related businesses.

Once the application is submitted through the SBA portal at this link the SBA processes an advance of up to $10,000. This advance is a grant and does not have to be repaid unless the business also gets a Payroll Protection Program (PPP) loan. In that case, it is added to the PPP loan and repaid through that program.

To qualify for the EIDL, the business must certify that it has suffered substantial economic injury as a result of the declared disaster. The loan amount may be up to $2,000,000. Proceeds of this loan may be used for:

1. Payroll costs during the business disruption or substantial slowdowns
2. Providing sick leave to employees unable to work due to Covid-19
3. Mortgage Payments
4. Rent
5. Meeting increased material costs due to interrupted supply chains
6. Repaying other obligations that cannot be met due to revenue losses

EIDL loans have a one-year payment deferral during which time interest accrues. There is then an up to thirty-year repayment period with interest at 3.75%. These loans require collateral to be put up if they are over $25,000 and personal guarantees if they are over $200,000.

What does Substantial Economic Injury mean?
There are a few areas that a business needs to be concerned about if they are considering an EIDL grant/loan. The first is that the business must have suffered a substantial economic injury. This term has a specific legal meaning. According to the SBA website; “The Applicant must establish that the claimed economic injury is substantial and is a direct result of the declared disaster. Substantial economic injury generally means a decrease in income from operations or working capital with the result that the business is
unable to meet its obligations and pay ordinary and necessary operating expenses in the normal course of business.” Loss of anticipated profits or a drop in sales is not considered substantial economic injury for the purposes of an EIDL. (13 CFR 123.300 (a) (2)).

Feel free to contact us with questions about this information. We are always happy to help.

The information provided herein is for informational purposes only and should not be construed as legal advice. The publication of this article does not create an attorney-client relationship between the reader and Patrick Neale & Associates. The reader should not act or refrain from acting based upon the information contained in this article without first contacting an attorney. The hiring of an attorney is a decision that should not be based solely upon advertisements or this article.

COVID-19 Update: Is it Time to Reopen?

Wed, 20 May 2020 15:15:00 GMT

SBA Payroll Protection Program Forgiveness Application

Greater Naples Chamber Back to Business Guide

New CDC Guidelines

There have been several significant updates on the COVID-19 recovery front in the last few days.

SBA Payroll Protection Program Forgiveness Application

One of the most important updates for businesses that obtained a Payroll Protection Program (PPP) loan is the release of the actual application that will be used to determine the forgiveness of the loan. It is a much more complex subject than can be covered in a short email or post. The primary takeaway is that you will need to have kept very good records of the expenditure of the funds and your employee count and hours. A link to the application is here. The application for forgiveness cannot be submitted sooner than 56 days after the disbursement of the funds. That is the time period used for the forgiveness calculation, unless using the Alternative Covered Period calculation method. The deadline for filing this application is currently unclear. We will send an update when we have more information. You should consider having an accountant or attorney review your application prior to submittal.

Greater Naples Chamber Back to Business Guide

The Greater Naples Chamber has just introduced an excellent guide to reopening your business. It provides guidance on the relevant CDC, EEOC, OSHA and Department of Labor guidelines and a suggested reopening plan. A very important element of any business’s reopening process is to have a written plan and procedure in place. It should be communicated to all employees. Proof that the business is following the best practices is a defense to any possible future liability claims. It should seek to protect both the employee and employer. A link to the guide is here. While you’re at it, check out all of the excellent resources on The Chamber’s web site.

New CDC Guidelines

The Centers for Disease Control and Prevention (CDC) has released its updated guidance for reopening the country and businesses. It is entitled “CDC Activities and Initiatives Supporting the COVID-19 Response and the President’s Plan for Opening America Up Again.” A link to that guide is here.

This is an ever-changing and challenging time for all of us. Our office is available to answer questions and provide you with guidance. Please stay safe and well.

Patrick Neale & Associates

239-642-1485

info@patrickneale.com

The information provided herein is for informational purposes only and should not be construed as legal advice. The publication of this article does not create an attorney-client relationship between the reader and Patrick Neale & Associates. The reader should not act or refrain from acting based upon the information contained in this article without first contacting an attorney. The hiring of an attorney is a decision that should not be based solely upon advertisements or this article.